1413774 (Migration)

[2015] AATA 3309

1413774 (Migration) [2015] AATA 3309 (4 August 2015)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANTS:  Mrs Yuyu Song
Miss Bin Jiang
Mr Lianguo Jiang

CASE NUMBER:  1413774

DIBP REFERENCE(S):  CLF2013/287085 CLF2013/287089 CLF2013/287092 CLF2013287090 CLF2014/83867

MEMBER:Antonio Dronjic

DATE:4 August 2015

PLACE OF DECISION:  Melbourne

DECISION:The Tribunal remits the application for Business Skills (Residence) (Class DF) visa with the direction that the first named applicants meets the following criterion for a Subclass 892 State/Territory Sponsored business Owner visas:

· cl.892.211(1) of Schedule 2 to the Regulations; and

·     The Tribunal does not have jurisdiction in respect of the third named applicant.

Statement made on 04 August 2015 at 1:12pm

STATEMENT OF DECISION AND REASONS

APPLICATION FOR REVIEW

1. This is an application for review of a decision made by a delegate of the Minister for Immigration on 6 August 2014 to refuse to grant the visa applicant a Business Skills (Residence) (Class DF) Subclass 892 visa under s.65 of the Migration Act 1958 (the Act).

2. The visa applicant applied for the visa on 20 November 2013.

3. The delegate refused the visa application as the first named applicant did not satisfy cl.892.211 of Schedule 2 to the Migration Regulations 1994 (the Regulations). The delegate was not satisfied on the evidence that the first named applicant had a continuing ownership interest in one or more actively operating main businesses in Australia for at least 2 years immediately before the application is made.

   Background to the application

4. The first named visa applicant nominated two main businesses in the visa application; Edulink International Pty Ltd and Jsandr Pty Ltd. The visa applications were lodged on 20 November 2013 and the relevant period for the purposes of cl.892.211(1) is from 20 November 2011 to 20 November 2013.

5. Ms Song acquired ownership interest in Edulink International Pty Ltd on 30 June 2009. This business was involved in strengthening educational ties between China and Australia and finding partnership opportunities for Australian universities in China. Ms Song became the sole director and shareholder of this business. She ceased to hold shares and have ownership interest in this business on 15 March 2012. It appears that the delegate accepted that the applicant had ownership interest in this business from 20 November 2011 to 15 March 2012. However, the delegate did not make findings as to whether Edulink International Pty Ltd satisfied the definition of a ‘main business’ as per regulation 1.11(1).

6. Jsandr Pty Ltd was registered on 21 February 2012. Ms Song was and still is the business director and the only shareholder. Jsandr Pty Ltd purchased a franchise business Cold Rock Werribee (CRW). The purchase of this business was settled on 8 June 2012 and the transfer of lease was executed on 25 June 2015.

7. The delegate found that Ms Song did not have ownership interest in Jsandr Pty Ltd until the company ‘commenced operating’. The delegate concluded that the company commenced operations more than three months after registration and more than three months after Ms Song ceased to have ownership interest in Edulink International Pty Ltd, on 15 March 2012. Accordingly, the delegate found that Ms Song did not maintain ownership interest in the main business from 15 March 2012 until 24 June 2012 (102 days). The delegate found that the applicant has failed to satisfy the definition of ‘main business’ in regulation 1.11 and that the applicant did not have ownership interest in the main business during the two years period immediately prior to lodging the visa application.

8. The applicants applied to the Tribunal on 11 August 2014 and with their application submitted a copy of the primary decision record.

9. On 13 February 2015, the Tribunal wrote to the applicants inviting their comments on validity of the review application made by Mr Lianguo Jiang. According to the departmental movement records, he was not physically present in the migration zone at the time of the review application.

10. On 13 February 2015, pursuant to s.359(2) of the Act, the Tribunal invited the applicants to provide information in writing demonstrating that he first named applicant satisfies criteria in cl.892.211(1). Relevant regulations were attached to the Tribunal’s letter.

11. On 26 February 2015, the applicant’s representative submitted that Ms Song is and has been a sole shareholder of Jsandr Pty Ltd since its establishment on 21 February 2012 and that a process of acquiring the ice cream business (Cold Rock Werribee) should be considered a part of the business operations of Jsandr Pty Ltd.

12. On 10 March 2015, the applicant’s representative provided further submissions arguing that during the period from 15 March 2012 to 24 June 2012, the business (Jsandr Pty Ltd) was involved in acquisition of Cold Rock Werribee; organised training sessions as required by the franchisor and arranged financing of the new business. He submitted a large folder of documentary evidence supporting the application, much of which was already provided to the Department with the visa applications. Index of these documents is located on tribunal folios 249-250.

13. On 28 April 2015, the Tribunal wrote to the applicants to advise that the Tribunal was unable to make a favourable decision on the material before it and invited the applicants to attend a Tribunal hearing scheduled for 28 May 2015.

14. On 21 May 2015, the applicant’s representative provided further documentary evidence in support of the application (tribunal folios 207-387) including:

    ·Statement from Ms Song date 21 May 2015;

    ·ANZ Bank Statements for Jsandr Pty Ltd from 22 February 2012 evidencing financial transactions made by the business during the period from 22 February 2012 to 30 June 2012;

    ·Suncorp Bank Statements (efpos facility provider for Jsandr Pty Ltd) from 18 May 2012 to 31 June 2012;

    ·Evidence of Jsandr Pty Ltd purchasing assets and stock as early as on 23 February 2012; and

    ·Additional evidence of business activities undertaken by Jsandr Pty Ltd from 7 May 2012 that was necessary for acquisition of Cold Rock Werribee.

15. The first and the second named applicants appeared before the Tribunal on 28 May 2015. The Tribunal hearing was conducted with the assistance of an interpreter in the Mandarin and English languages. The applicants were represented in relation to the review by their registered migration agent who attended the hearing.

16. The Tribunal began the hearing by explaining to the review applicants the role of the Tribunal and the purpose of the Tribunal hearing. The Tribunal informed the review applicants that the reason why the delegate had refused to grant the applicants visas was because that delegate had not been satisfied that the first named review applicant met cl.892.211 of Schedule 2 to the Regulations. The Tribunal explained why it formed the view that it has no jurisdiction in respect of the third named visa applicant and the applicants’ representative conceded this to be the case.

17. The Tribunal then explained to the review applicants’ further details about the review and how it would consider the claims and evidence before it, as well as explaining how the hearing would proceed. The first named review applicant confirmed that she was having no difficulty in understanding the interpreter.

18. I indicated to the applicants that, based on the evidence before me, I will make the following findings:

    ·I will accept that Edulink International Pty Ltd was one of two main businesses nominated in the visa applications and that this business met the requirements of regulation 1.11(1). I will accept that the applicant had ownership interest in this business from 20 November 2011 to 15 March 2012 and that she has maintained direct and continuous involvement in management of the business until 15 March 2012. I will also accept that Edulink International Pty Ltd met the definition of a qualifying business as defined in regulation 1.03 and that Ms Song held more than 51% shares in this business.

    ·I will accept that Jsandr Pty Ltd is one of two main businesses nominated in the visa applications and that she had ownership interest in this business from 21 February 2012 until present time. The remaining issue for determination is a question whether Ms Song maintains direct and continuous involvement in management of Jsandr Pty Ltd.

19. This is the summary of her oral evidence:

    She came to Australia in February 2009 as a holder of a subclass 163 visa. In China she has completed a Diploma in Accounting. Her husband is CEO of a company located in Tianjin city and is currently in China. She obtained ownership interest in Edulink International Pty Ltd in June 2009 and become the sole director and shareholder of this company. In January 2012, she decided to look for a new business. On 21 February 2012 she registered Jsandr Pty Ltd. The company obtained ABN number and registered for GT purposes on the same day. She was and still is the sole shareholder and director of this business.

    Jsandr Pty Ltd currently employs 3 part time and 8 casual employees, most of them young people from Werribee. The business turnover during the past financial year exceeded $300,000. She is in charge of finance, hiring employees, sales and marketing and makes decisions affecting the overall operations of the business.

20. For the following reasons, the Tribunal has concluded that the matter should be remitted for reconsideration.

    CONSIDERATION OF CLAIMS AND EVIDENCE

21. The Tribunal has before it the Department’s file relating to the applicants. The Tribunal also has had regard to the material referred to in the delegate's decision, and other material available to it from a range of sources.

22. The issue before the Tribunal is whether the first named applicant, who is the primary applicant for the purposes of the visa application, meets the requirements of cl.892.211(1).

23. Clause 892.211(1) requires that the applicant has had and continues to have an ownership interest in one or more actively operating main businesses in Australia for at least 2 years immediately before the application is made.

24. Regulation 1.03 provides that “ownership interest” has the meaning given to it in s.134(10) of the Migration Act 1958 (the Act). The definition of “ownership interest” in relation to a business as defined in s.134(10) of the Act includes an interest in the business as a shareholder in a company that carries on the business.

25. The Tribunal first must determine whether the nominated businesses meet the definition of main business as prescribed by r.1.11(1).

26. Regulation 1.11 provides that a business is a main business in relation to a visa applicant if:

    a) the applicant has, or has had, an ownership interest in the business; and

    b) the applicant maintains, or has maintained, direct and continuous involvement in management of the business from day to day and in making decisions affecting the overall direction and performance of the business; and

    c) the value of the applicant’s ownership interest, or the total value of the ownership interests of the applicant and the applicant’s spouse, in the business is or was:

    …

    (iii)      if:

    (A)      the business is not operated by a publicly listed company; and

    (B)      the annual turnover of the business is less than AUD400 000;

    at least 51% of the total value of the business; and

    d) the business is a qualifying business.

27. The Tribunal notes that the definition of main business requires the consideration of ownership interest which, in relation to determining whether there is a ‘main business’ as defined, is separate from the consideration of whether the relevant ownership interest is held at particular point in time for the purposes of the visa criteria.[1]

    [1] Ibrahim v MIAC [2009] FCA 1328 (Jagot J, 18 November 2009) at [32], stating that ‘if the Tribunal required an ownership interest at a particular time when deciding if a business is a main business, the Tribunal would err’.

28. As the applicant nominated two main businesses in her visa application, the Tribunal is required to makes findings in respect of each of the nominated businesses.

    Edulink International Pty Ltd

29. Based on the registered details of Edulink International Pty Ltd on the Australian Business Register, the Tribunal finds that the business was registered as an Australian private company. The Tribunal has had regard to the historical extract in relation to Edulink International Pty Ltd (Tribunal Folios 243-246) which indicates that the company was registered on 26 July 2006 and that the first named review applicant acquired her shareholding and was appointed a director on 30 July 2009.

30. Based on the ASIC historical extract, (Department File part 4 folios 16-20) I accept that the applicant has had 100% ownership interest in this business with the annual turnover of less than $400,000. Accordingly, the applicant meets reg.1.11(1)(a) and (c).

31. Based on the documentary evidence provided in respect of Edulink International Pty Ltd (Department File Part 2; folios 6, 10-22; 37- 40; 55; 57-70) I accept that Ms Song maintained direct and continuous involvement in day to day management of Edulink International Pty Ltd and made decisions affecting the overall direction and performance of the business from 20 November 2011 [being the beginning of the relevant period for the purposes of cl.892.211(1)] until 15 March 2012. Accordingly, the Tribunal finds that the applicant meets reg.1.11(1)(b) in respect of this business.

32. Based on the financial documents provided in respect of Edulink International Pty Ltd, I am satisfied that the company was operated for the purpose of making profit through the provision of goods, services or goods and services other than the provision of rental property to the public; and it is not operated primarily or substantially for the purpose of speculative or passive investment. Accordingly, the Tribunal finds that Edulink International Pty Ltd was a qualifying business and therefore satisfies reg.1.11 (1)(d).

    Jsandr Pty Ltd

33. Based on the registered details of Jsandr Pty Ltd on the Australian Business Register, the Tribunal finds that the business was registered as an Australian private company. The Tribunal has had regard to the historical extract in relation to Jsandr Pty Ltd (Tribunal Folios 239-242) which indicates that the company was registered on 21 February 2012 and that the first named review applicant acquired shareholding and was appointed as a director on the same day.

34. The Tribunal notes that r.1.03 provides that “ownership interest” has the meaning given to it in s.134(10) of the Act. The Tribunal further notes that the definition in s.134(10) includes “a shareholder in a company that carries on the business”. The delegate found Jsandr Pty Ltd did not ‘carry on business’ until a transfer of lease for franchise CRW was executed on 25 June 2012.

35. With her review application, the applicant provided documentary evidence of Jsandr Pty Ltd business activities undertaken during the period from February 2012 to June 2012. This includes evidence of funds injected into the business as early as in February 2012 (MRT folios 368-383). I accept the applicant’s submissions that variety of business activities needed to be undertaken and completed by Jsandr Pty Ltd before the business started selling ice-cream. The applicant listed some of the business activities undertaken by Jsandr Pty Ltd during the period from February 2012 to June 2012 (MRT folio 385). I am satisfied that activities such as organising the insurance, obtaining necessary licences, attending training, transferring utilities, negotiating lease agreements and finding employees (to list just a few) were in fact ‘business activities’ carried on by Jsandr Pty Ltd during the relevant period. It follows that I accept that the applicant was and still is a shareholder in a company that carries on the business as prescribed in s.134(10) of the Act.

36. Although the Tribunal is not bound by policy, the Tribunal notes that the above findings are not inconsistent with the Departmental policy:

    PAMS 31.5     Carries on the business

37. The definition of ownership interest for companies and partnerships requires the company or partnership to be carrying on a business. To be considered as ‘carrying on a business’ the company or partnership must have commenced business activities…

38. Based on the evidence before me, I am satisfied that Jsandr Pty Ltd commenced business activities in February 2012. Accordingly, the Tribunal finds that the applicant has had an ownership interest in this business and meets reg.1.11(1)(a).

39. Based on the Jsandr Pty Ltd Financial Statements I accept that the applicant has had and continues to have 100% ownership interest in this business with the annual turnover of less than $400,000. Accordingly, the applicant meets reg.1.11(1)(a) and (c).

40. Based on the documentary evidence provided in respect of Jsandr Pty Ltd and oral evidence received at the hearing, I accept that Ms Song maintained direct and continuous involvement in day to day management of Jsandr Pty Ltd and made decisions affecting the overall direction and performance of the business from 21 February 2012 until present time. Accordingly, the Tribunal finds that the applicant meets reg.1.11(1)(b) in respect of this business.

41. Based on the financial documents provided in respect of Jsandr Pty Ltd, I am satisfied that the company is operated for the purpose of making profit through the provision of goods, services or goods and services other than the provision of rental property to the public; and it is not operated primarily or substantially for the purpose of speculative or passive investment. Accordingly, the Tribunal finds that Jsandr Pty Ltd is a qualifying business and therefore satisfies reg.1.11(1)(d).

42. To satisfy criteria in cl.892.211(1), an applicant must have an ownership interest in at least one of the businesses nominated for and relied on to meet the time of application requirement for at least two years immediately before the application was made. Based on the evidence before me, I am satisfied that Ms Song has had an ownership interest in Edulink International Pty Ltd from 20 November 2011 [being the beginning of the relevant period for the purposes of cl.892.211(1)] until 15 March 2012.  I am also satisfied that the applicant has had and continues to have an ownership interest in Jsandr Pty Ltd from 21 February 2012.

43. Accordingly, the Tribunal finds on the basis of the claims and evidence before it that the first named review applicant meets the requirements of cl.892.211(1) of Schedule 2 to the Regulations because the first named review applicant had, and continued to have, an ownership interest in 1 or more actively operating main businesses in Australia for at least 2 years immediately before the application was made.

    Tribunal’s lack of jurisdiction in respect of the third named applicant

44. Based on the departmental records the Tribunal finds that the third named applicant was not physically present in the migration zone at the time of the review application. As the Tribunal reviewable decision is covered by s 338(7A), an application for review may only be made by a non-citizen who is physically present in the migration zone when the application for review is made as per s.347(3A) of the Act. Accordingly the Tribunal has no jurisdiction to review the application in respect of the third named applicant.

45. As the Tribunal finds that the first named review applicant meets the requirements of cl.892.211(1) of Schedule 2 to the Regulations, the appropriate course is to remit the applications for the visas to the Department to consider the remaining criteria.

    DECISION

46. The Tribunal remits the application for Business Skills (Residence) (Class DF) visas for reconsideration with the direction that the first named visa applicant meets the following criterion for a Subclass 892 State/Territory Sponsored Business Owner (Residence) visa:

    ·cl.892.211(1) of Schedule 2 to the Regulations; and

    ·The Tribunal does not have jurisdiction in respect of the third named applicant

    Antonio Dronjic
    Member